Acquisition of Multifonds Broadening our portfolio of - - PowerPoint PPT Presentation

Broadening our portfolio of mission-critical banking software

Acquisition of Multifonds

4 March 2015

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Any remarks that we may make about future expectations, plans and prospects for the company constitute forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors. In particular, the forward-looking financial information provided by the company in this conference call represent the company’s estimates as of 4 March 2015. We anticipate that subsequent events and developments will cause the company’s estimates to change. However, while the company may elect to update this forward-looking financial information at some point in the future, the company specifically disclaims any obligation to do so. This forward-looking information should not be relied upon as representing the company’s estimates of its future financial performance as of any date subsequent to 4 March 2015.

Disclaimer

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Transaction summary David Arnott, CEO About Multifonds Oded Weiss, CEO of Multifonds Financials Max Chuard, CFO Q&A

Agenda

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 Acquiring a leader in fund administration software, a complementary, adjacent market for Temenos  The acquisition will give Temenos

• access to highly complementary products
• client relationships with more than 30 of the world’s largest FIs
• entry point to the fast-growing fund administration market
• additional scale to fund future growth

 Adds USD 34m of annual recurring revenues – increasing visibility and predictability  Double-digit EPS accretion in first full year of ownership

Transaction summary

Together providing mission-critical software to 38 of the world’s top 50 banks

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What the transaction brings to Temenos

• Experienced and highly knowledgeable management team
• CEO of Multifonds and executive management team to continue driving

future growth

• Excellent tier 1 client base - high levels of retention
• Supplier to 9 of the world’s top 15 fund administrators
• Global presence with 470 employees in 14 offices worldwide
• Global leader in fund administration software, processing USD5trn in assets
• Mission critical products on a single software platform
• Fund administration is a new, complementary market for Temenos
• Strong historical revenue and EBITDA growth
• Highly recurring and visible revenue model with “sticky” products
• Double-digit EPS accretion in first full year of ownership

Strong financial profile Tier 1 client base and global coverage A leader in fund administration software Experienced management team

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Transaction summary David Arnott, CEO About Multifonds Oded Weiss, CEO of Multifonds Financials Max Chuard, CFO Q&A

Agenda

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• Assets under management are growing at c.7% p.a...
• Growth in global wealth, especially Asia
• …But, asset managers’ margins are under pressure
• Outsourcing to third-party administrators (TPAs), whose revenues growing at

c.10% p.a (large tier 1 TPAs seeing even faster growth in consolidating market)

• Moving to third-party software to improve efficiency
• Multifonds well-placed to capitalise on this trend
• Market-leading provider to TPAs (used by 9 of top 15 custodians)
• Unrivalled record on efficiency savings (c.40% on average)

Third party administrator market overview

A structural need for 3rd-party software

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Middle Office Services Fund Accounting & Compliance Transfer Agency & Investor Services

Accounting

 Investment accounting  Transaction processing  Cash flow forecasting  Intraday valuation (P&L)  Pricing  General ledger  Corporate actions  NAV calculation  Fees and expenses  Tax  Cash management  Pricing

Global Investor

 KYC / AML  Shareholder record keeping  Commissions and tax  Cash management  Performance / incentive fees  Equalisation  Series accounting  Partnership accounting

Overview of Multifonds’ solutions

Broad functionality delivered from a single platform

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Competitive landscape (Investor Servicing / Transfer Agency)

Traditional Long Only Funds Equalization US 1940 Act Alternative Funds Series Partnership UCITS Other

Investier InvestarOne Rufus / GFAS / GTAS NTAS Icon Retail (UK) mShare Paxus World Investor (Partner) Hedgetek Equitrak iFast Multifonds Global Investor

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Competitive landscape (Fund administration)

Traditional Long Only Funds Long Short US 1940 Act Alternative Funds Other Hedge PE / RE UCITS Asian

Dimension* Paxus STAR* HiPortfolio* InvestOne Icon mFact

* Primarily Middle Office (Portfolio Accounting) – limited Fund Accounting usage

Multifonds Global Accounting 2015 Geneva Beauchamp* / mFact Investran eFront GP3 InvestOne / Investier

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Tier 1 client base across all key regions globally

Accounting Accounting and Global Investor Global Investor

North America Europe Asia Pacific

Cross-sell opportunity with major clients of both Temenos and Multifonds

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Transaction summary David Arnott, CEO About Multifonds Oded Weiss, CEO of Multifonds Financials Max Chuard, CFO Q&A

Agenda

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Multifonds as part of Temenos

• Joint go-to-market and branding activities to commence straight away
• Global accounts structure will be leveraged immediately to seek cross-sell
• pportunities
• Temenos partner network to be leveraged to help scale sales and delivery
• Products to be brought together over time to create full suite of integrated solutions

for fund management industry

• Back-office integration will begin immediately
• Greater resources to fund organic and inorganic growth

Faster growth with better profitability

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Financial impact

• The consideration for the acquisition is EUR 235m
• Expected to contribute revenues of USD46m in 2015 (USD56m on a pro-forma basis), of

which more than 60% will be recurring revenues (see Appendix)

• Multifonds has been growing total revenues at around 10% per annum over recent

years

• Temenos expects to incur restructuring charges of USD 11m related to this acquisition,

the acquisition of Akcelerant and other cost rationalisation activities across the group

• The acquisition is expected be 4% accretive to non-IFRS EPS in 2015 and 10% in 2016
• Leverage to increase to around 2.4x EBITDA (back to 1-1.5x within 12-18 months)

Double-digit EPS accretion in first full year of ownership

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Total software licensing growth of 36% to 41% (implying total software licensing revenue

• f USD 194m to USD 202m)
• includes software licensing growth of 13%+ (implying software licensing revenue
• f at least USD 154m)

Revenue growth of 18% to 23% (implying revenue of USD 528m to USD 550m) EBIT margin of 28.5% (implying EBIT of USD 150m to USD 157m) 100%+ conversion of EBITDA into operating cashflow Tax rate of 17% to 18%

Revised non-IFRS 2015 guidance

Note: growth at constant currency (see rates in the appendix)

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 Acquiring a leader in fund administration software  The acquisition will give Temenos

• access to highly complementary products
• client relationships with more than 30 of the world’s largest FIs
• entry point to the fast-growing fund administration market
• scale to fund future growth

 Increasing visibility and predictability of revenues  Double-digit EPS accretion in first full year of ownership

Key takeaways

A compelling strategic rationale

Appendices

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FX assumptions underlying 2015 guidance

In preparing the 2015 guidance, the Company has assumed the following:

• USD to Euro exchange rate of 0.891
• USD to GBP exchange rate of 0.666; and
• USD to CHF exchange rate of 0.890.

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Multifonds 2015 non-IFRS income statement

Non-IFRS (USDm) 10 month contribution to Temenos Full year basis Software licensing 5 6 SaaS and subscriptions 25 30 Total software licensing 30 36 Maintenance 3 4 Services 13 16 Total revenues 46 56 Costs 33 40 EBIT 13 16

Thank you

www.temenos.com